Russian Lawmakers Approve Tax Discount for Small Oilfields
Russia’s State Duma approved tax discounts for small oilfields as the world’s largest crude- producing nation seeks to spur output from companies including Petroneft Plc, Volga Gas Plc (VGAS) and Exillon Energy Plc. (EXI)
The lower house passed the measure “in the first days of July,” Deputy Finance Minister Sergei Shatalov said in an interview today in Moscow. President Dmitry Medvedev will have to sign the proposal for it to come into force, he said.
The discounts would lower extraction taxes by as much as 50 percent at oilfields with less than 5 million metric tons (about 37 million barrels) of reserves. Russian Prime Minister Vladimir Putin has called on producers to maintain output at more than 10 million barrels a day for at least a decade to bolster revenues even as older deposits go into decline.
Russia may have 1 billion tons of oil spread over thousands of small deposits, Shatalov said in March. That’s equivalent to almost 9.5 percent of Russia’s proven reserves, according to BP Plc data. Petroneft, Volga Gas and Exillon have all raised funds on London’s Stock Exchange to exploit smaller fields often overlooked by Russia’s largest producers.
Russia’s proven oil reserves totaled 77.4 billion barrels at the end of last year, according to BP data.
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